I have a monitor (a basic 1280 x 1024 75 Hz monitor) that will rotate, so I tried setting up rotation in Settings / System Settings / Display and Monitor.

The problem is that I ended up with a virtual desktop larger than the display (basically when I moved my mouse to the right edge of the screen, everything would scroll off the left edge of the screen).

I recall that there used to be some settings that controlled this, but I searched for a while and couldn't find anything.

The recent(yesterday)'s emerge world broke the system and it now exhibit the same behavior as you had described,
(the rotated display appears as 1920x1920, with the extra space sildes when the cursor reaches the edge)

The rotation attributes also no longer sticks across X restarts. (tried unify display and save interface as default).